Put money into your workplace pension (with your employer's contribution and tax relief), or skip it, take the cash after tax and invest it yourself in an ISA? This finds the return you'd need outside the pension to come out ahead.
How this works
Option 1: Pension
Your contribution comes out of pay before income tax (and NI, with salary sacrifice).
Your employer adds their contribution on top.
It all grows at the pension return, minus fees.
At the end, the tax-free % is yours tax-free and the rest is taxed at your retirement rate.
Option 2: Invest it yourself
You take that money as pay instead, so income tax and NI come off first.
Your employer pays nothing extra.
What's left goes into an ISA and grows at your return.
At the end it's all yours, tax-free.
The key idea: both options cost you exactly the same take-home pay each month. The pension starts with more money (the tax relief and the employer's share); investing yourself needs a higher return to catch up. The calculator finds the return where they tie.
How to use it: enter your pay and contribution on the left, then set the two returns. Use Compare against → A lower level to test whether paying an extra % is worth it. The Copy link button saves your numbers in a link you can bookmark or share.
You
The pay your contributions are a % of. Often basic salary (check your plan; some include bonuses).
Many employers pay more as you pay more. Below the lowest tier, the employer pays nothing; above the highest, it stays at the top rate.
"A lower level" answers: is the extra % worth it vs taking that slice as pay and investing it?
Salary sacrifice also saves National Insurance.
Tax
Income tax and NI savings are worked out from your pay using the 2026/27 bands (England), including when a contribution crosses a band.
Investing
Pension, after tax at the end
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Take the cash and invest it, at the end
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What goes in
Totals over all the years
Growth over time (after tax, in future pounds, not adjusted for inflation)
Pension (after tax)Invest yourself
Year by year
"Paid in" is the running total going into each option. The pension's value is after the tax you'd pay if you took it all out that year.
Which wins? Your return vs pension return
Each cell is how much better or worse investing yourself is than the pension, as a % of the pension's result. Brown = investing yourself wins, grey = pension wins. The outlined cell is closest to your inputs.
What each contribution level gets you (per year)
"Per £1 of take-home" = how much lands in the pension for each £1 your take-home pay drops, compared with paying nothing. "Extra step" = the same, for moving up from the level above it only.
Assumptions (keep in mind)
Pay, contribution % and tax bands stay the same every year. No pay rises or inflation.
Contributions go in at the end of each year and grow at a steady return, after fees.
In the pension, the tax-free % is taken tax-free (capped at the £268,275 lump sum allowance) and the rest is taxed at your retirement rate. Taking a big chunk in one year can push you into a higher band.
Outside the pension, you invest the same take-home money you'd give up, in an ISA, so there's no tax on growth or withdrawal. The ISA limit is £20,000 a year.
The pension can't be touched until 55 (57 from April 2028). The ISA can be used any time, which this doesn't value.
Tax and NI savings use England 2026/27 bands (personal allowance £12,570, tapered above £100k; 40% from £50,270; 45% from £125,140; NI 8% then 2% above £50,270). Employers can withdraw salary sacrifice, and low earners may be moved off it. A cap on the NI saving has been announced for future years, so check the latest rules.
From April 2027, unused pension money may count towards inheritance tax.
Tax rules for England, 2026/27. Scotland and Wales differ. Not financial advice.